Streetwise Property Alert 27th June 2013

Spain – Is It Back

We have reported recently that some of the islands, especially Ibiza, have turned the corner and are on the way back; at least, sales and prices for certain sectors, mainly higher-end ones, are becoming more positive. Elsewhere? We’ve also reported that foreign investors, especially Brits, are bagging bargains. From what we can see, for the most part, these are at the lower end of the market. Frankly, you are often talking identikit units on not-quite completed developments short on facilities and infrastructure. Let’s not confuse ‘cheap’ with ‘good investment’.

Has the market bottomed? Catching up on industry publications, we note that Overseas Property Professional’s John Howell is saying that the cranes are back. He spoke to DLR Properties which state, ‘Buyers are back, particularly at the lower end of the market. Prices are creeping up. We are finding it difficult to find good inventory at the right price.’

Is it time to buy? Yes and no. If you are looking at the €500,000 mark – mindful of the new rules coming in for non-EU nationals- and at a good price, especially in one of the rising areas, it might be a good time to look. If you want a half-price, big mortgage, bog-standard unit on a half-empty development, there’s no rush. You’ve years and years to choose; the supply is limitless.

French Lending News

Trawling through notes provided by a contact attending the recent Property EU France Investment Briefing in London, we note that Roland Fuchs of real estate finance lender Helaba, says that that more finance is coming through for funding major French real estate developments. Those of you who have been active in this market know this has been something of an issue over the past 12 to 18 months.

‘More and more capital is being made available, even for non-core financing. The lack of core-plus and opportunity of financing deals in the market is more a result of the lack of investment opportunities in this area. As soon as investment opportunities and investors come back I think the finance will follow.’ We are currently looking at new projects in France, off-plan to almost completed, so please let us know if you are looking to buy here.

US – More Improvements

According to The First American Improving Markets Index (IMI) by the National Association of Home Builders (NAHB), the number of improving housing markets in the US reached 263 in June. The index tracks 50 cities on the basis of construction employment, housing permits and home prices for the previous six months in the region. A useful tool for would-be investors in the US.

29 new cities were added to the list of improving markets. Including Salinas, Baton, Topeka, Philadelphia and Iowa. 24 markets were dropped from the list including Montgomery, Bloomington, Hickory, Columbia, New Haven and Hartford.

‘As market conditions improve across most of the country, some metros have moved onto the IMI list while marginal seasonal fluctuations have nudged others off of it. This is to be expected as the recovery expands. Meanwhile, it’s worth noting that the number of improving markets is now more than three times what it was in June 2012.’ More to come.